This watchdog blog, by journalist Norman Oder, offers analysis, commentary, and reportage about the $4.9B project to build the Barclays Center arena and 15-16 towers at a crucial site in Brooklyn. Dubbed Atlantic Yards by developer Forest City Ratner in 2003, it was rebranded Pacific Park Brooklyn in 2014 after the Chinese government-owned Greenland Group bought a 70% stake going forward. As of 2018, after the arena and four towers were built, Greenland will own 95% of future construction.

After failing to ask many tough questions at the May 29 state Senate oversight hearing on Atlantic Yards, Sen. Bill Perkins, who chairs the Committee on Corporations, Authorities, and Commissions--or at least does so as long as the Democratic Party maintains control--has begun to grill the Metropolitan Transportation Authority (MTA).

In the letter (below) to MTA Acting Executive Director Helena Williams, Perkins asked the MTA to reveal the terms of the deal it is renegotiating with Forest City Ratner and further asked:

why no new RFP was issued

whether the MTA recognizes that many promised public benefits would be gone

whether the MTA has had the railyard site appraised and knows the Fair Market Value

whether the MTA thinks an independent appraisal is needed

what happens if Forest City closes the deal but doesn't proceed with the project

Perkins asked for a response by Friday, June 19, in anticipation of the June 24 MTA board meeting. The letter was CC'd to various state officials and local elected officials.

At the hearing you testified that MTA was engaged in renegotiations with Forest City Ratner regarding the development rights over the Vanderbilt Yards. The original deal required FCR to make various infrastructure improvements and remit 100 million dollars at closing. You reported at the hearing that the developer now wants to significantly scale down its commitments both in terms of infrastructure and money. It has been reported that the new terms of the deal will be voted on at the MTA’s next board meeting, scheduled for June 24th.

I write to request that the MTA immediately fax me a copy of any proposed amended agreements between MTA and FCR. There is already a great deal of public concern about the terms of the various deals at Atlantic Yards, in particular MTA’s acceptance of a substantially below-appraisal offer. Given MTA’s deep financial problems, its reliance on public bailout, and the many concerns raised about the viability of the Atlantic Yards project, MTA must make every effort to engage the public now, so that no new Vanderbilt Yards deal is ratified without the public having a substantial opportunity to review and comment.

Public engagement is always important, but it is particularly critical now that so many of the alleged public benefits of the Atlantic Yards project have diminished or vanished altogether. For example, the state of the art rail yard FCR was to build is no longer on the table as the new yard would have fewer tracks than are currently in place and that were originally promised; the IBO has concluded that the arena will now be a money-loser for the city; promised office space has been scrapped, substantially reducing revenue and jobs; there are no concrete or near-term plans to build the bulk of the promised affordable housing, which is contained in Phase 2 of the project plan, which has no timeline; the “world-class” Frank Gehry design has been scrapped for a cookie-cutter alternative; the much-touted “Urban Room” public space has been discarded; the remaining so-called public space is all contained in Phase 2, which again has no timeline; and then ESDC CEO Marissa Lago stated publicly that the project will take “decades” to complete, which will continue or even exacerbate for a generation the so-called blight the project was intended to resolve, and significantly delay or deny the public’s accrual of benefits.

The public needs to know that it is getting the best deal possible and that the MTA is not granting sweetheart deals to developers at the expense of taxpayers, straphangers and the local community. To that end, in addition to immediately providing a written copy of the renegotiated terms, please provide detailed written answers to the following questions:

1) Why is MTA renegotiating terms with FCR rather than demanding performance or rescinding the agreement and re-issuing the RFP in order to determine whether there are other interested parties?

2) In renegotiating the terms, did MTA consider that most of the alleged public benefits it considered in 2005 have since substantially diminished or vanished altogether?

3) Has the MTA contracted an independent appraiser to appraise the Vanderbilt Yards to determine their current Fair Market Value? If not, why not? What is the current Fair Market Value of the Vanderbilt Yards?

4) Given that the new agreement will be substantially and materially different from the original, making it a new agreement, does not the Public Authorities Accountability Act of 2005 now apply and impose a fiduciary duty on MTA board members and require that the sale of property for fair market value be supported by an independent appraisal? If not, why not?

5) What are FCR’s obligations to the MTA if the deal closes but the developer does not proceed with the project?

Time is of the essence. These answers need to be known and made public prior to the MTA board considering any new deal regarding the Vanderbilt Yards. Therefore please provide a written response to my office no later than Friday June 19, 2009. Thank you.